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Kicked at the Start and Other Thoughts

Hey, missed me? It’s been two months since my last column, because I got a little busy on this end. Actually, I had written (almost) an entire column last month — on Archie Comics’ Kickstarter — but before I had a chance to send it in, Archie pulled the plug on the Kickstarter, and I felt like running it as written would have been kicking them when they were down, so I chucked out what I wrote and skipped another month.

But, maybe some of what I wrote still has a little value, so let’s see what I can say about crowd-funding in general, rather than focused on Archie in particular?

In relationship to retail, I think there are a few basic problems with any kind of crowdfunding. First and foremost is the “80/20 rule.” Basically, this rule says that eighty percent of your sales are generated by 20 percent of your customers (as well as the corollary that 80% of your problems are generated by 20% of the customers as well — thankfully, these are usually different 20 percents!).

So, why is this a problem for retail in relationship to crowdfunding? Well, crowdfunding, in general, seeks to capitalize upon finding that 20% and getting as much out of them upfront as possible. They tend to be the people who are the passionate “early adopters,” and the people who are much more likely to pony up for the most expensive packages.

Now, obviously, from the POV of a creator who is trying to fund the creation of art, finding those “whales” is really helpful, because they’re the most likely to fund your project. And it seems super-attractive to cut out the middleman and go directly to your patrons. The problem that I see is that the actual business model in comics (and probably all art in general, but I’m only certain about my specialty) is the long-game.

That is to say: the real benefit comes not from how many copies of your comic you sell today, upfront, this moment, but how many you sell tomorrow and next month, and next year and next decade. When we discuss actual success in comics, it seems to me that the measurement is best made in the long-game. “Hotness” is great, and you can make a whole lot of money upfront and fast in certain situations, but the amount of money that, say, “Watchmen” made as a serialized release utterly pales in comparison to the accumulation that has occurred over the decades that have followed.

I would take 1% of “The Walking Dead” issue #1, over 50% of the 1992 “X-Men” #1 (that sold eight million copies on release) any day of the week, because TWD has paid out more over time — and, more importantly, will continue to do so for many decades to come!

But one of the key ways that this happens is in retail embracing, or at least supporting, you — there are far more comics that I could rack than I have space to rack. Which means there’s some sort of merit-based system happening in most retail spaces to figure out what gets racked and what doesn’t. Sometimes this is a strictly dollars and cents calculation, while other times it is driven more by passion and aesthetics, but, regardless of the source, that calculation determines your rack presence as well as the long-term gain that’s possible from your work.

Now, while the long-term prospects of a work is where the money is, there is also a short-term war that’s fought over square inches of display — you need to cross over this line in order to stay on the racks for the long-term success. This doesn’t necessarily happen on a book-by-book basis. Many times we’ll say, “Oh, we support this creator, here is all of their stock racked together” — so getting on a retailer’s “radar” becomes the name of the game. If I like Joe Creator’s work, if I feel as though Joe is supporting the market in general, or my individual store in particular, if I think I want to “be in the Joe business,” all of this makes it significantly more likely that I will rack and continue to rack a work for years to come. Conversely, if I start to suspect any of that is wrong, then that radically decreases the amount of rope I’m willing to extend.

So, then, my experiences with Kickstarters is that they suck all of the oxygen out of the room at the start — they’re drawing away much, if not all, of the 80% of dollars that the 20% most passionate customers can spend. That makes us significantly more gun-shy to try and support a work over the long- or even medium-haul. I will go so far as to say that I can not think of a single Kickstarted book that has gone on to be successful book for us — even when I supported the “retailer tier” style offers, and had access before the rest of the market.

Because the goal can’t just be “have enough material to make a book” — it also has to be “…and position that book for long-term sales with a variety of partners.” The more folks in retail you have stumping for you (or even simply tacitly supporting by passively racking), the more chances you have to expand your audience. A single spine of a single book won’t do very much for your career, but having three volumes of your ongoing work begins to make each book sell the other ones. The goal, as I see it, is to grow both your audience as well as your library, and throwing out the easiest market for a retailer (the initial sales interest) makes it harder to offer the resources to allow retailers to help you do those things.

I think there’s another problem, as well, that’s reflected in the name of the service itself — Kickstarter isn’t designed to be an ongoing platform of patronage; it is meant to kickstart your project, so you can bring it to market in the first place, but then you should do the rest of the work on your own. Kickstarting project after project would seem to me to be very much against the intentions of the mechanism. Moreover, when I see a creator go back for the second and third (or more) books, I think “This is a person who doesn’t understand how business is meant to work” — getting capital is always the hardest part for any kind of start up business, but once you have that capital, you need to leverage it to build more capital on its own. I started my store 26 years ago with $10K and a comics collection, and with sensible reinvestment, we’ve increased that many-fold and more. But if you’re not using Kickstarter to fund the production of enough copies so that, once those sell, you (probably) never need Kickstarter again… Well, you’re almost certainly doing it wrong.

And this criticism absolutely extends to “real” publishers in a much stronger way. In theory there’s no reason that a publisher couldn’t generate some content using crowd-funding, but what the real-world impact is is that it makes it appear that you’re not a solvent or capable business. It is one thing if you’re picking up a Kickstarted work because that showed you that the creator(s) bring the “A Game” to promotion and craft, it is another thing we your turn to the crowd and say “We can’t (or won’t) afford to do this on our own.”

If it’s a one-time thing, if it is bridge financing, or as a way to set up a future program that is clearly sustainable, then you can count on (well, or at least hope for) the sympathies of the audience. When I went to the internet to talk about the problems that increasing Minimum Wages have for small independent retail, our solution is trying to build something that will be self-sustaining so that I won’t ever have to do that again. Same thing for the bridge-funding campaigns that Fantagraphcs or Slave Labor did — these are seen as “virtuous” because it’s looking to fund something very specific, to get those companies over a specific cash flow hump and back in the black.

For a company like Archie, however, the perception is (right or wrong) that they’re a “Big League” company, with well-established branding, a clear audience, and a focused marketing plan. There are, perhaps, a dozen publishers in comics today that are a flatly poor fit to Kickstart, because the market expects them to be able to take care of their own problems to begin with. I don’t think that almost any observer believed that Archie couldn’t finance the creation of content, and, as it turned out, what the company needed money for was to fund expansion into Big Box retailers like WalMart. That’s probably a valid need, actually — but it’s not something you sell through a creative-oriented space like Kickstarter.

If you are a company the size of Archie (or even a Dark Horse, an IDW, a BOOM! or Avatar or Dynamite), you’re perceived as a viable content-producing business, and one that should be, for content alone, self-sustaining. If you wanted to go to the crowd for something that’s outside of your wheelhouse, something totally new to you, then maybe the public can support that — I don’t even know that I necessarily have a good example of what kind of product extension that might be — but when you’re talking about the core of your business, the thing you’re supposed to actually be competent and capable with? I have a hard time picturing the crowd embracing you. The crowd is happy to support a sad story, or if you’re momentarily down-on-your-luck, or otherwise blindsided by something unexpected. But ongoing aspects of your core business? Hard to see.

Even if and when you find the right path, the right pitch, you should be careful to make it market-friendly. If you’re just offering the public the same product you’re offering to me, but faster and cheaper, then what’s my incentive as a retailer to support you at all? This is what drove those handful of retailers who threatened to “boycott” Archie over their Kickstarter, but it impacts almost anyone using the service at all — you have to find a way to differentiate between the Kickstarted product and the general retail release. If you can’t do so, you’re telling the market the wrong message: either “we don’t need you” or “we don’t want you,” neither of which should leave you surprised when your partners on the other side of the table then say “Guess what? Back at you!”

I do know that my reaction when I heard what Archie was doing was “Well, no point in going ‘long’ to see how much I might be able to increase sales by” because who wants to bear additional risk for a partner who appears to be trying to cut you out?

That’s probably the core problem: Kickstarter does not appear to be an additive business model generating new leads and business — it appears to be taking money from one pocket and moving it to another, while, like most “Stealing Sharing Economy” business models, skimming off a percentage for adding little value. It’s a short-term bridge, not a long-term platform.

If there is one thing that the Direct Market 2015 really needs is fewer comics. I am not kidding about this at all, we are radically overproducing the amount of comics coming out. And coming out of February’s ComicsPRO meeting, virtually every publisher I spoke with seemed to agree, most of which indicated they were trying to prune down their lines in late ’15 and early ’16.

I think if we learned one single lesson from the DC “New 52” experiment was that they didn’t have 52 good ideas, and even if they did, they didn’t have 52 good creative teams capable of executing those ideas. The market isn’t looking to buy 52 comics from a single publisher in a month — there’s virtually no reader who really is actually interested in more than 4-5 good titles a week. That’s like 16-20 books in a month.

From a business development perspective, I guess I can sort of understanding trying to hit twice that. To allow for attrition and whatnot. But as a dedicated market watcher, and intimate participant in that market, it is hard for me to get enthusiastic about such a plan.

As I said in the link above, what this market really needs is more comics that sell fifty or more rack copies per store, and a whole lot less that sell five or fewer — and launching 55-60 comics is a pretty good way to generate more mediocre selling comics.

It is my firm belief that if Marvel relaunched the Marvel Universe with six to eight comics a week, really A-level stuff, most or all of them would be capable of sustainably selling six figures a month. Doubling that output will likely mean we’ll end up in a year back where we are now with tons of titles selling 40k and under.

In today’s market less is more.

This is not a thing we’ll be publicly repeating (we do this for clients of our consulting services), but if you’re interested in How The Sausage Gets Made (and, really, you probably shouldn’t be), then I’d like to point you to a recording we made of an ordering meeting.

This doesn’t have any editing, and is an honest chronicle of how we initially discuss approaching the order form each month. This is the first step where the two managers and myself go over “Previews,” cover to cover, talking about the shape of the month and what relative thoughts we have about what to order in what and why. I say “honest” because, although we’re obviously aware of the mic, we’re not saying or acting any differently than we usually do.

After this meeting, the managers will each then write the month’s order, which I then go over because I am overly pedantic. I also recheck all orders every week during the FOC (Final Order Cut-off) process.

This meeting lasted over 3 hours, and that’s normal most months. Each manager spends probably around six hours writing their order form pass, and my pedantic pass is about three hours per store each month. FOC takes me about an hour every week. An awful lot of time and energy goes into ordering comics!

As I say, it’s painfully long, and it probably isn’t very interesting to most of you… but those who are interested in process will probably find it illuminating!